{"id":28562,"date":"2026-07-13T15:44:15","date_gmt":"2026-07-13T14:44:15","guid":{"rendered":"https:\/\/www.open.ac.uk\/blogs\/news\/?p=28562"},"modified":"2026-07-13T15:44:15","modified_gmt":"2026-07-13T14:44:15","slug":"why-the-us-economy-stays-strong-even-when-its-policies-shock-the-rest-of-the-world","status":"publish","type":"post","link":"https:\/\/www.open.ac.uk\/blogs\/news\/arts-social-sciences\/why-the-us-economy-stays-strong-even-when-its-policies-shock-the-rest-of-the-world\/","title":{"rendered":"Why the US economy stays strong even when its policies shock the rest of the world"},"content":{"rendered":"<p>The US economy is\u00a0<a href=\"https:\/\/ec.europa.eu\/eurostat\/statistics-explained\/index.php?title=National_accounts_and_GDP\">continuing to grow<\/a> faster and generate more new jobs than Europe. Annual national income growth over the past five years has averaged 3.3% in the US against 2.6% in the EU. In the first quarter of 2026, the EU\u2019s GDP was just 0.7% higher than a year before, while that of the US was up 2.6% on comparable measures, <em>says <a href=\"https:\/\/profiles.open.ac.uk\/alan-shipman\">Alan Shipman<\/a>, Senior Lecturer in Economics, The Open University.<\/em><\/p>\n<p>These figures defy the\u00a0<a href=\"https:\/\/budgetlab.yale.edu\/research\/fiscal-and-economic-effects-revised-april-9-tariffs\">widespread predictions that<\/a>\u00a0the US would lose its growth advantage after its government imposed a global trade tariff regime in 2025 and, one year later, started a war with Iran. Economists see several factors behind the resilience of the\u00a0<a href=\"https:\/\/theconversation.com\/topics\/us-economy-124249\">US economy<\/a>.<\/p>\n<p>The US runs consistently\u00a0<a href=\"https:\/\/www.apolloacademy.com\/comparing-the-cyclically-adjusted-deficit-in-the-us-and-europe\/\">wider budget deficits<\/a>\u00a0than the EU, UK or China. By spending more than it collects in tax, the US government creates more income for the people it employs and the businesses it buys from. This extra income in theory boosts demand in the economy, pushing output growth higher and reducing unemployment.<\/p>\n<p>Most European governments also run budget deficits. The\u00a0<a href=\"https:\/\/ec.europa.eu\/eurostat\/web\/products-euro-indicators\/w\/2-22042026-ap\">average budget deficit<\/a>\u00a0of EU countries in 2025, for example, was 3.1% of GDP. But the US deficit, at 5.8% of GDP that same year, is giving a much stronger stimulus.<\/p>\n<p><a href=\"https:\/\/theconversation.com\/why-the-us-economy-stays-strong-even-when-its-policies-shock-the-rest-of-the-world-285979\">Full article available on The Conversation<\/a><\/p>\n<p><em>Picture credit: www.kaboompics.com on Pexels<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The US economy is\u00a0continuing to grow faster and generate more new jobs than Europe. Annual national income growth over the past five years has averaged 3.3% in the US against 2.6% in the EU. In the first quarter of 2026, the EU\u2019s GDP was just 0.7% higher than a year before, while that of the [&hellip;]<\/p>\n","protected":false},"author":19,"featured_media":28563,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,15],"tags":[860,1525,1640,2200],"class_list":["post-28562","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-arts-social-sciences","category-society-politics","tag-faculty-of-fass","tag-news-home","tag-ou-home","tag-the-conversation"],"_links":{"self":[{"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/posts\/28562","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/users\/19"}],"replies":[{"embeddable":true,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/comments?post=28562"}],"version-history":[{"count":2,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/posts\/28562\/revisions"}],"predecessor-version":[{"id":28565,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/posts\/28562\/revisions\/28565"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/media\/28563"}],"wp:attachment":[{"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/media?parent=28562"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/categories?post=28562"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.open.ac.uk\/blogs\/news\/wp-json\/wp\/v2\/tags?post=28562"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}